This page summarizes the results of a survey of small rental property owners conducted by Nat Decker of the Terner Center for Housing Innovation at UC Berkeley. Firstly, I want to thank everyone who participated in the survey. As I mentioned in the initial postcard, the owners of small rental properties are not well understood by either academics or policymakers and your answers to these survey questions will help show the real picture of small rental property ownership. I also want to provide additional thanks to everyone who agreed to participate in a follow-up interview. I truly appreciate your generosity with your time.
The survey was solicited by mail and conducted online from March to August 2019. The table below shows the response rate for the survey. A total of 53,000 owners were solicited for the survey. Solicitations consisted of an initial invitation to the online survey via postcard and two rounds of follow-up reminders, also via postcard. The survey consisted of approximately 150 questions covering a broad range topics including the characteristics of the rental properties, tenants, and owners and detailed questions about the decision-making processes for managing and investing in rental propeties. Collectively 1,949 solicitations were found to be undeliverable. 155 owners logged into the survey but were found to not be part of the sample population (e.g. the respondent had recently sold their rental property or the property was never a rental). Of the 50,896 remaining solicited owners, 1,109 began the survey with 836 clicking through the entire survey and the remaining 273 ending the survey prematurely. Not all respondents who clicked through the entire survey answered all applicable questions. The final response rate, including partial responses, was 1.8%. Collectively, respondents owned 17,037 units.
| Results | Number | Percent |
|---|---|---|
| Total Sample | 53,000 | 100 |
| Bad Addresses | 1,949 | 3.7 |
| - | ||
| Survey Starts | 1,109 | 2.1 |
| Out of Population | 155 | 0.3 |
| Partial Responses | 259 | 0.5 |
| Click Throughs | 695 | 1.3 |
| - | ||
| Click Throughs + Partial | 954 | 1.8 |
In addition to the survey I conducted 161 interviews to develop a more detailed understanding of SRP owners. Interviews were solicited at the conclusion of the online survey and conducted via phone in the weeks after the respondent completed the survey. Interviews generally lasted from thirty minutes to an hour and covered basic information such as the owners’ portfolio size, the markets they operated in, and their properties and tenants, and more detailed discussions of their acquisition, financing, rent-setting, maintenance, and tenant selection strategies, and their tenant screening procedures.
The summary below provides a chart or table of how survey-takers answered each question on the survey. Not every survey question is summarizead as a few questions are not very interesting in isolation (e.g. the number of bedrooms of the unit surveyed) or had very few responses. Note that the total number of responses varies from question to question because of incomplete surveys. Some of the questions are cross-tabulated with the portfolio size of the owner. The distribution of survey takers by portfolio size is shown below:
| Portfolio Size of Owner | n |
|---|---|
| 1-2 units | 185 |
| 3-10 units | 606 |
| 11-50 units | 240 |
| >50 units | 78 |
The owners who responded to the survey were quite diverse, reflecting some of the diversity of owners nationwide. Most owners held their properties under their own name, but larger owners were more likely to hold their properties in a corporate entity (mostly LLCs). Individual owners were mostly over 60 years old, male, and white, though younger, female, and non-white owners were not uncommon.
While no institutional investors responded to the survey (the largest portfolio was srpos %>% select(PortfolioEst) %>% max() units) there were substanial differences in the extent to which rental properties were a major part of the owner’s professional life.
The survey was limited to the owners of small rental properties. Condominiums were included, as each condominium unit is its own property. Cooperative units were included as well, though only 2 respondants were asked about a cooperative unit. Most of the survey respondants owned a single-family detached house.
Most of the variation in rents comes from the differences between geographic markets (e.g. San Francisco generally has higher rents than Elyria, OH) and the units themselves (e.g. 3-BR homes with a yard tend to have higher rents 2-BR units in a duplex with no yard).
To adjust for these differences I calculated comprable rents for every unit using the Zillow Rent Index (ZRI). This Index is meant to estimate the rent for units that are comprable to the survey units in terms of geography (by ZIP code), building type (single-family rental v. apartments), size (measured in square feet), and time (by month of the survey response). The comprable estimates have a few weaknesses (e.g. lot size isn’t considered, physical quality and floorplans aren’t considerd), but ZRI comps do provide a useful baseline of the market.
86% of owners who reported having an inspection passed the inspection.
Relative to all owners of small rental properties in the US, survey respondants tended to have large portfolios.
The sample frame consists of the private owners of 1-4 unit rental properties in the top 150 metros of the US. The sample was created in collaboration with Roofstock, Inc., a firm that provides services to small rental property investors and managers, and uses county assessors and recorders data provided by ATTOM. Roofstock performed extensive owner identity resolution on the ATTOM data to clarify portfolios of small rental properties (owners names alone are insufficient to identify portfolios given different name spellings and the use of LLCs and other legal entities). These estimates of owner portfolio size allowed for a stratification of sample by portfolio size and ensured that owners were not solicited multiple times. Large portfolio owners were over-sampled to provide a clearer picture of a group that is relatively small in the context of all SRP owners.
As anticipated the survey over-sampled larger owners, though the diversity of SRP owners was well-covered among survey respondents. Considered by portfolio size, the largest group of owners, with 1-2 unit portfolios, was represented by 150 respondents.1 Geographically, the distribution of respondents was very similar to the distribution of SRPs among the top 150 metros based on American Community Survey data, with some under-sampling of the New York and Los Angeles metros and slight over-sampling from the Portland, OR and San Francisco, CA metros. Considered by legal structure, the respondents disproportionately held their properties in LLCs, relative to the nationwide SRP distribution from the Rental Housing Finance Survey, though nearly half of the total units owned by the respondents were held by individuals.
Stratification by metro?
| Metro Area | Responses |
|---|---|
| san francisco-oakland-hayward, ca | 40 |
| los angeles-long beach-anaheim, ca | 39 |
| chicago-naperville-elgin, il-in-wi | 37 |
| portland-vancouver-hillsboro, or-wa | 30 |
| atlanta-sandy springs-roswell, ga | 26 |
| dallas-fort worth-arlington, tx | 26 |
| sacramento-roseville-arden-arcade, ca | 25 |
| detroit-warren-dearborn, mi | 24 |
| miami-fort lauderdale-west palm beach, fl | 24 |
| houston-the woodlands-sugar land, tx | 21 |
| san diego-carlsbad, ca | 20 |
| phoenix-mesa-scottsdale, az | 19 |
| denver-aurora-lakewood, co | 18 |
| riverside-san bernardino-ontario, ca | 18 |
| washington-arlington-alexandria, dc-va-md-wv | 18 |
| kansas city, mo-ks | 17 |
| new york-newark-jersey city, ny-nj-pa | 17 |
| tampa-st petersburg-clearwater, fl | 17 |
| nashville-davidson–murfreesboro–franklin, tn | 16 |
| charlotte-concord-gastonia, nc-sc | 15 |
| seattle-tacoma-bellevue, wa | 15 |
| las vegas-henderson-paradise, nv | 14 |
| memphis, tn-ms-ar | 14 |
| austin-round rock, tx | 13 |
| cleveland-elyria, oh | 12 |
| san jose-sunnyvale-santa clara, ca | 12 |
| virginia beach-norfolk-newport news, va-nc | 12 |
| wichita, ks | 12 |
| baltimore-columbia-towson, md | 11 |
| boston-cambridge-newton, ma-nh | 11 |
| chattanooga, tn-ga | 11 |
| philadelphia-camden-wilmington, pa-nj-de-md | 11 |
| urban honolulu, hi | 11 |
| cincinnati, oh-ky-in | 10 |
| columbus, oh | 10 |
| pittsburgh, pa | 10 |
| columbia, sc | 9 |
| indianapolis-carmel-anderson, in | 9 |
| louisville/jefferson county, ky-in | 9 |
| oklahoma city, ok | 9 |
| st louis, mo-il | 9 |
| bakersfield, ca | 8 |
| lexington-fayette, ky | 8 |
| minneapolis-st paul-bloomington, mn-wi | 8 |
| new orleans-metairie, la | 8 |
| palm bay-melbourne-titusville, fl | 8 |
| salt lake city, ut | 8 |
| san antonio-new braunfels, tx | 8 |
| baton rouge, la | 7 |
| knoxville, tn | 7 |
| omaha-council bluffs, ne-ia | 7 |
| orlando-kissimmee-sanford, fl | 7 |
| raleigh-cary, nc | 7 |
| reno, nv | 7 |
| santa maria-santa barbara, ca | 7 |
| stockton-lodi, ca | 7 |
| tulsa, ok | 7 |
| NA | 6 |
| birmingham-hoover, al | 6 |
| dayton, oh | 6 |
| milwaukee-waukesha-west allis, wi | 6 |
| north port-sarasota-bradenton, fl | 6 |
| santa rosa, ca | 6 |
| tucson, az | 6 |
| youngstown-warren-boardman, oh-pa | 6 |
| akron, oh | 5 |
| albuquerque, nm | 5 |
| fresno, ca | 5 |
| greensboro-high point, nc | 5 |
| oxnard-thousand oaks-ventura, ca | 5 |
| richmond, va | 5 |
| rochester, ny | 5 |
| shreveport-bossier city, la | 5 |
| toledo, oh | 5 |
| winston-salem, nc | 5 |
| albany-schenectady-troy, ny | 4 |
| ann arbor, mi | 4 |
| cape coral-fort myers, fl | 4 |
| madison, wi | 4 |
| savannah, ga | 4 |
| springfield, mo | 4 |
| syracuse, ny | 4 |
| vallejo-fairfield, ca | 4 |
| beaumont-port arthur, tx | 3 |
| boise city, id | 3 |
| buffalo-cheektowaga-niagara falls, ny | 3 |
| charleston-north charleston, sc | 3 |
| colorado springs, co | 3 |
| davenport-moline-rock island, ia-il | 3 |
| des moines-west des moines, ia | 3 |
| evansville, in-ky | 3 |
| greenville-anderson-mauldin, sc | 3 |
| harrisburg-carlisle, pa | 3 |
| jacksonville, fl | 3 |
| kalamazoo-portage, mi | 3 |
| lakeland-winter haven, fl | 3 |
| little rock-north little rock-conway, ar | 3 |
| mcallen-edinburg-mission, tx | 3 |
| mobile, al | 3 |
| modesto, ca | 3 |
| new haven-milford, ct | 3 |
| salem, or | 3 |
| salinas, ca | 3 |
| scranton-wilkes-barre-hazleton, pa | 3 |
| south bend-mishawaka, in-mi | 3 |
| spokane-spokane valley, wa | 3 |
| thomasville-lexington, nc | 3 |
| wilmington, nc | 3 |
| worcester, ma-ct | 3 |
| asheville, nc | 2 |
| augusta-richmond county, ga-sc | 2 |
| bridgeport-stamford-norwalk, ct | 2 |
| corpus christi, tx | 2 |
| deltona-daytona beach-ormond beach, fl | 2 |
| durham-chapel hill, nc | 2 |
| el paso, tx | 2 |
| fayetteville-springdale-rogers, ar-mo | 2 |
| fort wayne, in | 2 |
| grand rapids-wyoming, mi | 2 |
| hartford-west hartford-east hartford, ct | 2 |
| hickory-lenoir-morganton, nc | 2 |
| huntsville, al | 2 |
| jackson, ms | 2 |
| niles-benton harbor, mi | 2 |
| pensacola-ferry pass-brent, fl | 2 |
| peoria, il | 2 |
| racine, wi | 2 |
| reading, pa | 2 |
| rockford, il | 2 |
| springfield, ma | 2 |
| visalia-porterville, ca | 2 |
| york-hanover, pa | 2 |
| alexander city, al | 1 |
| allentown-bethlehem-easton, pa-nj | 1 |
| auburn, in | 1 |
| auburn, ny | 1 |
| bartlesville, ok | 1 |
| bloomington, in | 1 |
| brownsville-harlingen, tx | 1 |
| burlington, nc | 1 |
| eugene, or | 1 |
| flint, mi | 1 |
| florence-muscle shoals, al | 1 |
| gainesville, ga | 1 |
| granbury, tx | 1 |
| killeen-temple, tx | 1 |
| lancaster, pa | 1 |
| lansing-east lansing, mi | 1 |
| manchester-nashua, nh | 1 |
| mansfield, oh | 1 |
| montgomery, al | 1 |
| naples-immokalee-marco island, fl | 1 |
| portland-south portland, me | 1 |
| poughkeepsie-newburgh-middletown, ny | 1 |
| provo-orem, ut | 1 |
| punta gorda, fl | 1 |
| rome, ga | 1 |
| sandusky, oh | 1 |
| santa cruz-watsonville, ca | 1 |
| selma, al | 1 |
| spartanburg, sc | 1 |
| stillwater, ok | 1 |
| tallahassee, fl | 1 |
| trenton, nj | 1 |
| twin falls, id | 1 |
| warrensburg, mo | 1 |
| winchester, va-wv | 1 |
Data on the national distribution of owners by portfolio size are from @strochak_five_2017.↩